What is Permanent Health Insurance?

Permanent Health Insurance (PHI), also known as Long Term Income Protection, provides policyholders with a replacement income up to the age of retirement in the event long term sickness or disability which prevents them being able to work.

In contrast, Short Term Income Protection policies, also known as ASU (Accident, Sickness and Unemployment), provide replacement income usually only over a 12 month period, and are primarily concerned with short term effects of unemployment (though they typically also offer additional benefits to cover sickness and accident).

Many employers provide some sort of short term benefit in the event of sickness, and the State provides Incapacity Benefit, but neither option will offer much compensation if you are off sick beyond 4 weeks.

PHI cover will pay out a guaranteed level of income every month as long as the term of the policy (potentially up to retirement age) and provided your incapacity continues. The maximum monthly benefit payable is usually 65% of a person's annual income, less any benefits that they are entitled to from their employer or the state.

These types of policies can never be cancelled by the insurer and most will allow you to make several claims so long as the circumstances are legitimate. Depending on the premium that you're prepared to pay, the monthly payments can be index-linked to that they keep pace with inflation and the rising cost of living.

Further Information

What is Permanent Health Insurance?

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